Mobility

Can IoT and connected cars save a failing BlackBerry?

The future of BlackBerry has been hazy for a while, as analysts speculate whether it can be made relevant again with a move into the trucking industry and its QNX platform for automakers.

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The QNX platform is in 50 million vehicles from 20 different automakers.
Image: BlackBerry

BlackBerry is pulling farther away from the smartphone market it once ruled and is looking for new ways to increase revenues by pushing into IoT with its Radar system for the trucking industry and promoting its longstanding QNX mobile operating system.

The company made a relatively paltry $14 million in profit in the first quarter of fiscal 2017, for the period ending May 31, 2016, with only $424 million in revenue. But BlackBerry is busy trying to reinvent itself and analysts speculate whether CEO John Chen can turn it around with IoT products and focusing on QNX.

"I think that they've got opportunities there especially as we see more and more devices that need the kinds of qualities that QNX has. QNX has been around for as long as I've been in the industry. It's always been one of the two or three most popular operating systems out there," said Jeffrey Hammond, an analyst with Forrester.

William Stofega, an analyst with the International Data Corporation, said, "[QNX] is something that can be leveraged. A lot of folks when they look at some of the other OEMs that want to get into these markets, QNX is already there. It gives them a lot of leeway."

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Bob Bilbruck, CEO of B2 Analyst Group, was more bullish on BlackBerry, and said, "Mr. Chen needs to realize what BlackBerry is. The greatest value of their software today is QNX. I think as the software gets more involved in IoT, that only strengthens BlackBerry. They didn't miss their numbers by that much this last quarter."

"I think Chen is the guy. I think he sees all that potential for the IoT type business, but I think the market is growing a little bit slower than they anticipated. But Priv allows them to stay in the game and keep their revenues where they are in the $420 million market. The concern is their earnings side of that has been dropping more rapidly than companies Chen benchmarks them against. I think that has to do with the slower growth of the IoT market. I think there's a lot of indecisiveness about what road they're going to go, so QNX isn't being adopted as quickly but it's obvious to everyone that it's the most coveted platform," Bilbruck said.

It's even more important to focus on promising products, such as QNX, as BlackBerry loses more ground in the smartphone arena. BlackBerry recently announced that it was going to stop making the iconic BlackBerry Classic with its full Qwerty keyboard, which is the most recognizable BlackBerry handset, reminiscent of the Bold 9900 design.

"With the Classic, I think the way to look at it is what John Chen has said, if you can't make money in the business, he's not going to be in that business. Devices that aren't really positioned to continue, it didn't surprise me one bit that he discontinued that device. He's very focused on making things profitable to the extent he can," Stofega said.

The new BlackBerry

"We've really become a different company over the last few years. We have four units—enterprise software, secure communications, smartphone division focused on secure smartphones and communications, and the fourth area is BlackBerry's technology solutions," said Steve West, senior director of business development for BlackBerry Technology Solutions. The Technology Solutions division was formed two years ago to bring BlackBerry's licensable technologies under one umbrella.

SEE: BlackBerry's Radar, Internet of things meets trucking system, critical to turnaround

"First and foremost is QNX, an embedded software technology company. QNX is big in medical, it's in GE's MRI machines, it's in every eye laser system in the world. It's big in security, big in defense. A lot of those customers we can't talk about. The company has been around for 30 years, but it's a big growth area. We're extending technology across a much broader segment of verticals," West said.

One of those areas is the auto industry. QNX was acquired by BlackBerry in 2010 and Ford chose it to replace Microsoft for its Sync platform. QNX's acoustics software is in more than 50 million vehicles across 20 automakers.

BlackBerry feels strongly about the potential of its move into the auto industry.

"From a QNX perspective, we have the number one market share in auto infotainment," said Grant Courville, senior director of product management for QNX Software Systems.

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The Radar system is intended to increase profitability in the trucking industry by allowing them to track assets more easily.
Image: BlackBerry

The trucking industry is another area for growth. In March, BlackBerry introduced Radar, which is a secure asset tracking system. It is designed to give transportation and fleet managers and fleet logistics a new way to increase productivity by tracking equipment and knowing where the drivers are on the road.

"What we focused in on were specific solutions. Transportation was an obvious one for us. We also saw a big gap in the transportation and logistics industry that was really ready for a more modern approach to asset tracking," West explained.

Stofega said that he sees Radar as a product with potential, because it tells how efficiently a vehicle is operating and ensures that a vehicle is ready when it's needed, rather than relying on a driver to call in and report a vehicle's location.

Regardless, Stofega said, "at the end of the day there are a lot of things that are promised but there's a lot of work to do. In some cases there will be upgrade work to take antiquated equipment and upgrade it, and that is where a lot of the money will be made."

BlackBerry recently partnered with Safran because more cars are becoming connected. About 20% of new cars today are connected and some industry reports peg it at 80% or more by 2020, Courville said.

"As these vehicles become connected, there's a need to work closely with the carriers. With Safran there is an embedded SIM in the vehicles. It allows for remote provision of the SIM. If I want to go from AT&T to Verizon to Sprint, we can do this with software. There's a new standard that's emerging so we have a complete cellular framework," Courville said.

BlackBerry also recently announced a QNX platform for instrument clusters, because vehicles are migrating from mechanical gauges to hybrid instrument clusters, Courville said.

"We're taking more of a platform approach in the vehicles," he said, explaining that reducing driver distraction and creating a safer environment is key. "It's about keeping your eyes on the road and using elements to design a compelling user interface and a safe interface."

Three takeaways for TechRepublic readers

  1. BlackBerry debuted its IoT Radar platform to offer asset tracking for better profitability for the trucking industry.
  2. The BlackBerry Classic has been discontinued, as the company pulls away from the smartphone market.
  3. Despite its age, BlackBerry's QNX platform is a growing asset for the company and is now present in 50 million vehicles.

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About Teena Maddox

Teena Maddox is a Senior Writer at TechRepublic, covering hardware devices, IoT, smart cities and wearables. She ties together the style and substance of tech. Teena has spent 20-plus years writing business and features for publications including Peo...

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